This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Can Lenovo Overcome the Negative PC Bias?

NEW YORK ( TheStreet) -- Personal computers are a dying. I'm not attempting to reveal anything new with that statement. In fact, it has become a foregone conclusion for quite some time. PCs are now being replaced by mobile and more agile devices from Apple (AAPL - Get Report), Google (GOOG - Get Report) and Samsung.

If you look at how Hewlett-Packard (HPQ - Get Report) and Dell (DELL) have traded recently, it is easy to see the market has been merciless in punishing anything associated with PCs.

Even Microsoft (MSFT - Get Report) which many will contend was the true force behind the dominance of PCs has essentially thrown its hands up by announcing its Surface tablet -- essentially signaling to both HP and Dell that it's now every man for himself.

But nobody remembered to tell Lenovo (LNVGY.PK), China's largest PC maker, that it shouldn't be performing so well.

In today's climate, over 90% of Lenovo's $30 billion annual revenue still comes from personal computers -- an impressive accomplishment on many levels. This includes being the brand of choice for one third of every PC sold in China, a market with a population of over 1 billion people.

Yet the company remains a relative unknown among investors. Not many had even heard of Lenovo until it acquired IBM's (IBM) popular line of ThinkPad notebooks back in 2005.

After growing its global PC sales last year by 4%, the company is now projected to surpass HP by 2013 in terms of PC production. But Lenovo does not seem content. It now has its sights set on the mobile device and tablet market.

Can it take on Apple's iPad dominance? That's a pretty tall task. And considering the results of its most recent quarter, it seems that the company's efforts would be better served growing its margins instead of focusing its sites on Apple.

But it's hard to not want to give it the benefit of the doubt -- particularly because it appears to have a sound management team with a good understanding of what drives revenue growth. Impressively, the company was able to growth its shipments by almost 25% in an environment when the global PC market saw a shipment decline of roughly 1%.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DELL $0.00 0.00%
AAPL $93.74 0.00%
GOOG $693.01 0.00%
HPQ $12.27 0.00%
MSFT $49.87 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs